Council favours 10 per cent tax break for business, funded in part by budget cuts

While blaming Mayor Naheed Nenshi for previous failures at resolving Calgary’s tax crisis, a majority of city council is now backing a proposal to slash commercial tax bills this year by 10 per cent and institute budget cuts that could result in city layoffs.

“Council dropped the ball,” said Coun. Evan Woolley. “And I’m particularly disappointed that the mayor has been unable to champion council and rally everybody around some significant relief for the business community and the city.”

Woolley said the new notice of motion going to a special meeting of council Monday will offer “significant” and “immediate” relief for the business community — though it’s likely to mean service reductions in the near future.

The proposal would see $130.9 million applied to reduce bills for non-residential tax accounts through a phased tax program, similar to programs used in 2017 and 2018 to cap taxes.

Proponents say $70.9 million will come from funds already set aside for tax relief and $60 million through budget cuts, including “reductions and/or the elimination of programs, services and staffing positions.”

The plan asks city administration to begin work immediately to implement a tax relief package, despite the fact 2019 tax bills have already been mailed out. Property owners who pay their taxes on a monthly basis would see their payments adjusted in August and those who pay their bill in a single instalment could receive a rebate by the end of July.

The motion also calls on the mayor to ask the provincial government to consider long-term reforms to the tax and assessment process. One potential solution to the downtown tax problem could involve creating new categories of non-residential properties.

Several councillors who signed their names to the proposal have blamed Nenshi and previous councils for not striking a better balance in the business-to-residential property tax ratio and for not addressing problems sooner with the provincially legislated assessment process.

“This has been a long-term issue. The mayor should have led this a few terms ago,” Sutherland said. “It has come to a crisis now and councillors (have) got together and said, ‘Well, that’s it — we’re going to get together as a group and we’ve got to make this happen.’ “

Coun. Ward Sutherland.Darren Makowichuk /
Postmedia

Council had appeared to be united last week when a release was published outlining a potential response to the downtown tax problem that included signatures from 14 out of 15 council members.

Sutherland said the previous proposal didn’t go far enough or cut deep enough to address the tax hikes businesses are facing. He said it will be difficult, but the city must find significant savings immediately.

“The challenge obviously is going to be the reduction of services. It’ll involve employee layoffs, most likely,” Sutherland said. “Those details will be decided in July’s council (meeting).”

Nenshi and councillors Jeromy Farkas, Druh Farrell, Jyoti Gondek and Ray Jones haven’t signed on to the proposed 10 per cent cut.

Nenshi did not immediately respond to a request for comment, but a spokesman for the mayor said a statement was to be released.

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Currently, businesses pay a larger share of the tax burden compared to homeowners, shouldering approximately 53 per cent of the overall budget.

Farkas said he will continue to advocate for his own solution, which would include reduced wages and benefits for council members, senior staff and regular city employees. He said he would prefer to see wages reduced before job cuts or layoffs.

Jones said he was unaware of the motion put forward by his colleagues, but said he is open to discussing it at Monday’s meeting. Farrell could not be reached for comment.

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